- A recently released WEF blog said that 2022 was a difficult year for crypto as over $2 trillion had evaporated.
- The blog also adds: What the big banks and mature financial services firms do, not what they say.
- The article reiterated the need for reducing the risks of crypto by encouraging its responsible use.
The World Economic Forum(WEF) released a blog laying out the future of cryptocurrencies, as a part of its annual meeting. The blog acknowledged that 2022 was a difficult year for crypto as over $2 trillion had evaporated in the largely speculative market.
The crypto industry and decentralized financing as a whole was seen by many as a correction to financial issues that gave rise to the financial crisis in 2008. However, the trust of investors of consumers and businesses who lost money started waning.
Big-scale crypto firms like Celsius, Terra, and FTX have also given policymakers another reason to emphasize crypto regulations as they continue to point out the risks that come with it. But even after all the crises that surrounded crypto, the underlying technology of blockchain has stood the test of time.
The blog read:
While the underlying technology of cryptography and blockchain is generalizable to all industries and coordinating activities (collectively the building blocks of Web3), experimentation at the core of financial services, among other sectors, continues unabated.
The article goes on to add: Indeed, as a test of the staying power of digital assets and blockchains at the core of financial services (and other areas of the global economy), watch what the big banks and mature financial services firms do, not what they say.
WEF added that crypto quickly punishes the errant and gives bad actors few places to hide. The blog reiterated the need for reducing the risks of crypto by placing blockchain technology in the hands of ‘responsible actors’ and encouraging its responsible use.